Many industries adopt digitalization, which is a continuous evaluation process that has yet to be able to grow its roots in the system. This continuous transformation could reshape the auditing environment, meaning that the auditor profession could face shifts ( Elliot & Harackiewicz, 1994 ). Auditors face technological adaptation, as improvement brings about a noticeable change in the accounting and auditing sectors. With the digitalization of the accounting industry, auditors are more likely to depend on modern technologies and development. Owing to technological advancements, globalization, and increased competition, careers are constantly changing. A report by Forbes Insights (2014) implies that an auditor’s ultimate skill is adaptability. Although this skill is needed throughout the career, especially now when digitalization is reshaping our society and auditors’ tools ( Forbes Insights, 2014 ), it does not change the need for quality and accuracy in audits ( Forbes Insights, 2014 ). Technological advances, including complex IT systems and business records in digital formats, have drastically changed audit evidence ( Knudsen, 2020 ). In a study on accountants’ adoption of digital tools in emerging economies, AlNasrallah and Saleem (2022) found that usefulness and ease of use affect accountants’ intentions to adopt digital technologies. Similarly, Nguyen and Gopalaswamy (2018) find that the adoption of digital technologies, e.g., System Application and Process (SAP), helps record accounting transactions efficiently and accurately. The application of a digital interface significantly improves the time efficiency. This study also anticipates that it can reduce costs related to the processing of financial transactions.

Digitalization can be viewed as an opportunity or threat within the accounting profession. The digitalization of accounting and auditing accelerated during the pandemic ( Coman et al., 2022 ). There is a vast opportunity for diversity in digitalization. Some of these include blockchain technology, AI, archival data management, and cloud accounting ( Mohan et al., 2023 ). Accountants can acquire new skills, particularly engineering, to aid the emergence of new accounting professionals ( Gulin et al., 2019 ). Simultaneously, accountants need to comprehend how technology and digital transformation transform the workplace. Lombardi et al., 2015 have argued that an overall change in accounting was observed due to digitalisation. A blockchain is a decentralized digital ledger that records transactions between two sides in a peer-to-peer (P2P) network and encrypts them ( Jans et al., 2022 ; Mohan et al., 2023 ). A critical feature of Distributed Ledger Technology (DLT) is that its data are immutable, ensuring that records cannot be deleted or modified except when corrected with a balancing entry ( McGhee & Grant, 2019 ). These benefits and challenges are related to audit quality, skills, efficiency, and profile, and most of these impacts likely demand a specific application and understanding of complex technologies ( Lombardi et al., 2015 ). These innovative signs of progress can pressure the auditing environment, so they are significantly associated with auditors and stakeholders ( Knudsen, 2020 ). The audit profession, which executes operations to offer assurance that financial statements accurately match present accounting standards and precisely reveal a firm’s financial statements, is also facing technological transformation ( Lombardi et al., 2014 ). The auditing profession, like any profession, cannot resist advances that may increase the efficiency or effectiveness of the process, or it will find itself no longer compatible with the modern age (ibid.). An alternative approach is to investigate the challenges and benefits digitalization can bring to the current state of auditing ( Tiberius & Hirth, 2019 ).

Ratzinger-Sakel and Gray (2015) refer to an over thirty-year gap between practice and academic communities in their study. They consider this a significant obstacle that must be tackled for the audit profession to become a learned one ( Ratzinger-Sakel & Gray, 2015 ). Lombardi et al. (2015) seem to share the same thought, explaining that “…the auditing profession, as any profession, cannot resist advances that may further the efficiency or effectiveness of the process, or it will find itself no longer viable.” (p. 15). Some of the critical benefits of digitalization in accounting and auditing include increased efficiency, improved accuracy and reliability of financial information, enhanced data management and analysis, and greater accessibility and transparency ( Manita et al., 2020 ).

Knudsen (2020) claims that the auditor’s requirement to possess IT skills and abilities is growing, a present-day competence demanded. The study conducted by Manita et al. (2020) also agrees with the importance of technical skills derived from digital transformation, meaning that auditors must feel confident while using digital tools. Similarly, Tiberius and Hirth (2019) believe that annual auditing will replace continuous or even real-time auditing. Hunton and Rose (2010) argued that auditors will begin to transition from manually collecting data to managing complex decision support systems and thus have to become comfortable with trusting these systems. Collin (2015) describes the idea of digitalisation and its associated impacts as a “global megatrend that is fundamentally changing existing value chains across industries and public sectors”. Therefore, digitalization is inevitable for firms in many contemporary industries.

According to Lombardi et al. (2014) , auditing is one of the fields most affected by such technological advancements. However, a study later published by the same three researchers claimed that auditing has yet to entirely rip the benefits of digitalization because there has not been enough incorporation ( Lombardi et al. (2014) ). On the other hand, a report ICAEW (Institute of Chartered Accountants in England and Wales) states in her report that “Disruptive technologies also have a profound impact on the skills required of auditors…” ( ICAEW, 2018 : p. 5). Lombardi et al. (2014) add that auditors must become prepared and trained to handle the new challenges of collecting and processing big data. Conversely, Raphael, 2017 suggests that auditors do not necessarily need to be computer programmers or experts in technological development. Nonetheless, they need practical experience and are able to handle new tools to handle and analyze data ( Raphael, 2017 ). Alles (2015) challenges the audit field to embrace the opportunities that arise from digitalization, mainly Big Data, and hopes that the audit field will have learned its lessons from the past and towards a positive, proactive response instead of a defensive reaction to market pressure. The one study conducted by Johansson and Sjöberg (2016) concluded that while digitalisation played some role in auditing, especially for young auditors working in the Big Four accounting firms (Deloitte, EY, KPMG, and PwC) auditors expected digitalisation to play a far more significant role in the future.

Despite the numerous challenges, the trend towards digitalization in accounting and auditing will likely continue as the profession responds to the changing needs and expectations of businesses and society ( Lombardi et al., 2015 ). In the coming years, many accounting transactions will be handled by AI and automation systems (Profession of the Digital Age: Accounting Engineering, 2020). Numerous job titles are at risk of automation, with accounting having the highest probability of being automated and digitized shortly.

ICAEW (Institute of Chartered Accountants in England and Wales) states in their report, “Disruptive technologies are also having a profound impact on the skills required of auditors.” Johansson and Sjöberg (2016) concluded that while digitalization played a role in auditing, especially for young auditors working in the Big Four accounting firms, auditors expected digitalization to play a far more significant role. Significant concerns have also been raised about the risk exposure associated with applying digital interfaces in the accounting of financial transactions ( Awang et al., 2022 ). However, as is the case with other emerging economies, the extent to which digitalization affects in an emerging country like Bangladesh’s accounting and auditing is still being determined. This research offers a comprehensive study to explore the status of digitalization in accounting and auditing practices within the theoretical framework of accountability.

Dialogic accounting considers that individuals may have different views and perspectives ( Brown, 2009 : p. 324). It aims to facilitate the “expression of different perspectives and to encourage individuals and groups to engage in democratic interactions across perspectival borders” and develop accounting and accountability practices that reflect these diverse views (ibid.). It requires establishing a broad stakeholder base and recognizing insufficiently influential groups to have a voice in decision-making (ibid.).

Dialogic accounting aims to create effective participatory processes that enable individuals and groups to construct their views and values and to identify critical issues according to their preferences. Engagement is deemed effective only when participants can engage in this manner, and they can “speak and press their claims in their voices” ( Dillard & Brown, 2012 : p. 10). However, there are challenges in achieving this in practice ( Brown, 2009 ). Lessons learned in participatory contexts inside and outside accounting reveal the need to involve stakeholders early in the engagement processes and to develop procedural rules to create “a more even playing field ‘for all participants’” ( Brown, 2009 : p. 326). Dialogic accounting calls for participatory forms of accounting that take pluralism more seriously. A participatory approach should allow actors with diverse perspectives to resolve issues related to their interests. A pluralistic environment should create space for various stakeholders to participate in contested issues ( Brown, 2009 ).

Dialogic accounting promotes dialogue and participation among stakeholders with multiple ideological perspectives. Through dialogue, it seeks to create space for alternate views and provide a “platform for normally unheard voices to be heard” ( Bebbington et al., 2007 : p. 366).

Dialogic accounting claims that pluralistic accounting and accountability must explicitly recognize and challenge power relationships, for example, by “exposing the frames dominating specific decision outcomes and the resulting distribution of economic, social, environmental, political, and cultural impacts” ( Dillard & Brown, 2012 : p. 10). Dialogic accounting recognizes how power asymmetries can influence decisions and restrict the participation of individuals and groups. According to Brown (2009: p. 326) , “attention to the power dynamics inherent in any accounting situation is vital to ensure that currently marginalized groups are included in participatory processes… and that their concerns and priorities are not defined out of technical models”. Dialogic accounting recognizes “the power dimensions of social relations” and how power asymmetries among stakeholders affect or prevent some from participating in or influencing decisions ( Brown, 2009 : p. 219).

Within the following multiple Critical Dialogic Accounting themes, we have examined digitalization in the accounting and auditing field in Bangladesh and whether our accounting and auditing practitioners are ready yet to adopt automation and digitalization. Further, we have extended the discussion to the overall impact of digitalization to ensure accountability in tackling the challenges in an emerging economy context.

What is the impact of digitalisation on accounting and auditing processes in Bangladesh?

The objective of this research is to investigate and analyze the impact of digitalization on the accounting and auditing field, with a specific focus on the impact of digital tools in the accounting and auditing process. The research aims to explore how the adoption and integration of digital tools and technologies have influenced various aspects of accounting and auditing. It aims to assess how these tools have transformed traditional practices, workflows, and methodologies, and to identify the benefits and challenges associated with their implementation. The research will examine how digital tools have affected the quality and reliability of financial reporting, auditing procedures, and the provision of assurance services. It will investigate the necessary skills and competencies required for professionals to effectively utilize digital tools and technologies in their work. It will examine the potential risks and limitations associated with the use of digital tools.

We have conducted a qualitative study using a thematic analysis approach to explore the impact of digitalization in accounting and auditing, specifically focusing on the impact of digital tools in the accounting and auditing process. We utilized semi-structured interviews to gather rich and detailed insights from professionals working in the accounting and auditing field who have experience working with digital tools.

We have selected participants (see Appendix 1) from diverse backgrounds, including accountants, auditors, and other relevant stakeholders, who have practical experience in utilizing digital tools in accounting and auditing. This method aims for a diverse sample in terms of organization size, industry, and geographical location to capture a wide range of perspectives and experiences.

We have conducted a total of 15 in depth semi-structured interviews, allowing participants to share their experiences, opinions, and observations related to the impact of digitalization and digital tools in the accounting and auditing process. Each interview lasted one hour. We used open-ended questions to explore various aspects, such as benefits, challenges, changes in practices, decision-making processes, and job roles. Audio-recorded and/or transcribed the interviews to ensure accurate data capture.

We have performed thematic analysis to identify recurring patterns, themes, and insights from the interview transcripts. We begin by familiarizing with the data through reading and re-reading the transcripts, noting initial ideas and impressions. The initial codes were generated by identifying meaningful units of information related to the impact of digitalization and digital tools. The codes were organized into potential themes, grouping related codes together to create a coding framework. We reviewed and refined the coding framework by iteratively applying it to the data, ensuring consistency and capturing all relevant themes and analyzed the relationships between themes, looking for connections, contradictions, and overarching narratives. We interpreted and summarized the findings, drawing upon direct quotes and providing a rich description of the impact of digitalization and digital tools in accounting and auditing.

Ensure credibility by maintaining an audit trail of decisions made throughout the research process, documenting methodological choices, and keeping detailed research records. We also seek peer debriefing and input from colleagues or experts in the field to validate interpretations and enhance the rigor of the analysis.

We obtained informed consent from participants, ensuring they understand the purpose of the research, their rights, and how their data will be used. We Anonymized participants’ data by assigning pseudonyms or codes to maintain confidentiality.

We present the findings in a clear and organized manner, using quotes and excerpts from the interviews to support the identified themes. A comprehensive and nuanced description of the impact of digitalization and digital tools in accounting and auditing were provided, highlighting the key themes, patterns, and insights derived from the thematic analysis.

Overall, the data set shows that digitalisation in accounting and auditing indicates a technical change in accounting and auditing. A change is observed in accounting and auditing processes due to digitalisation. The professionals perceive the change as a technical change. These changes have caused a transformation of many accounting procedures, especially from manual to automated procedures. This change includes the implementation of various accounting software and digital tools that have been adopted in the profession, such as ERP (Enterprise Resource Planning) systems, CAAT (Computer-Assisted Audit Techniques) software, and SAP software. Data analytics and artificial intelligence are also used to ensure professional competency. The accountants have mentioned that Enterprise Resource Planning is used in accounting to automate recording procedures. Some of the interviewees (i.e., P8, 9, & 13) mentioned that vesides accounting data processing, ERP provides a wide ranges of support to business operations. e.g., financial management, supply chain and distribution management, human resource management and so on. ERP improves the operational efficiency of the business. It helps business to automate routine task, freeing up employees to focus more on other strategic business activities. ERP also helps business to access real-time date and analytics. Through ERP business can gather information on key performance indicators, consumer’s attitude and behavior and market trends. As a result, business can anticipate and predict changes. This results in improved decision-making process of the business. Hence, business can formulate better strategy to run efficiently (P8, 9 & 13).

The introduction of digitalisation and the availability of digital tools in accounting, manual steps are reduced, reducing complications. The number of paper-related functions in the accounting process has also reduced. Data suggests the accounting process can now be fully practiced within their businesses’ accounting practice framework. An audit officer has claimed:

Digitalisation increases the speed of the auditing and accounting processes and our efficiency (P3).

AI and Data Analytics create summaries and generate information that automates various financial operations, such as setting the credit limit for the buyers of a company automatically by the system.

The interview data also indicates software used to automate the auditing process. The practitioners and academicians observe a difference in the definition of digitalisation. The accountants and auditors have defined digitalisation from a technical perspective. Accountants have defined digitalisation as the automation of accounting and audit practices. The only theoretical definition observed among the accountants and auditors is considering the overall digitalisation process as part of the fourth industrial revolution.

To the practitioners, the transformation from manual, automated accounting and audit practice is digitalisation. It indicates perceiving digitalisation from a more technical than theoretical perspective. Practitioners have mentioned using various advanced technologies as tools of digitalisation and using these tools in the process of accounting and auditing as part of the sector’s digitalisation. The impact of digitalisation is observed in various definitions, indicating the shift from the manual procedure to automation of accounting and auditing; this is considered the main impact of digitalisation in accounting and auditing in the Bangladesh context. Due to increased complications and the involvement of too many steps and procedures, keeping a small business updated involves much work pressure.

Compliance with accounting standards is always ensured with the application of digital tools. It was understood from the analysis that digitalisation tools are created adhering to the standards. According to an audit supervisor: Due to digitalization, we can now easily use the standards, for example, IFRS16-Lease, IFRS17, and IAS21. How we should treat leases can now be locally and easily adapted based on our present circumstances (P14).

This act ensures that all the records and financial information are made available in compliance with the accounting standards. The digital tools also enhance audit traceability. It indicates that in case of any fraudulent activity, it becomes easier to identify. Transparency, accuracy, enhanced traceability, and assurance ensure the trust of the stakeholders in the financial reports and audit reports. The transition to digital technology has been beneficial to the auditors. The auditors’ repetitive tasks have been simplified due to the growing use of digital tools. The new tools’ opportunities enable the auditor to obtain information from clients with greater efficiency ( Karlsen & Wållberg, 2017 ).

The most noticeable improvement in the accounting and auditing sector due to digitalisation is the increased transparency in the accounting and auditing processes. According to the dataset, more transparency is obtained through applying digital tools. Although from the perspective of current auditors, all digitalisation tools still need to be applied entirely in auditing, auditors still anticipate that it could make the data access and review process more accessible.

According to the auditors, digitalisation also removes the possibility of fraudulent activities and facilitates transparency. The possibility and scope of making fictitious transactions and receipts are less due to the application of digital tools. Now, the transactions and their records are more transparent due to the application of digital tools. Before digitalisation, excessive paperwork made it difficult for auditors to identify fictitious transactions. There is assurance due to digital tools auditing, which eventually leads to securing public trust and confidence. Digitalisation also considerably lowers the possibility of fraud and financial manipulation. However, there is a hidden risk and power struggle that cannot even be tackled through digitalisation in Bangladesh. As such one participant’s has claimed:

Digitalisation creates huge transparency and accountability in public financial management, but there are some other things that the company always try to hide; sometimes they manipulate the financial statement, so digitalisation just cannot avoid the control under this one some actually gives you the picture, but behind the picture, you do not know, and throughout the digitalisation, you cannot actually control that one so this is a problem for us (P7).

In a middle-income country like Bangladesh, significant costs are involved in achieving digitalisation. We have also discovered in the analysis that the achievement of digitalisation is the application of digital tools in accounting and auditing processes. Sometimes, the costs even work as a barrier to achieving digitalisation efficiently. It also needs to be more focused on the original purpose of the application of digitalisation. The economic cost is a considerable obstacle to obtaining the benefits of digitalisation. From a senior accountant’s perspectives:

Unfortunately, the main limitation is the financial and technical capacity required to build this software, which is insufficient within the existing CA firms of Bangladesh. As a result, institutes like ICAB do not even pressure our local CA firm to implement these tools or fully adapt to digitalization as they already know about the limitations (P13).

The cost is more compared to the benefit gained from the context of Bangladesh. Despite the costs and financial obstacles and software not being cost-effective, the auditors still find the ultimate results of digitalisation beneficial to the profession. However, the dataset also identifies a knowledge gap between the accountants and the IT professionals. Due to the increased complexity of the system and software, the accountants need help to see the tool’s functionality from the inside. The mechanism of the systems is incomprehensible for the accountants. On this aspect opinion from an audit officer.

Currently, our manpower in auditing and accounting is not that adapted to the technology and lacks technical knowledge, so we need to grow the technical knowledge of our manpower, and then it will be easier for us. Authority of the Professional Body and provide development programs to the auditors (P3).

While, using digital tools and technology, accountants and auditors can understand fraud, misstatements, or unusual transactions. However, correcting the issue could sometimes be challenging due to the lack of IT knowledge required to operate and modify the software. Relying on technology can raise problems like dependency on an IT expert, so the work process becomes slow, which will ultimately lack efficiency in accounting and auditing tasks. Accountants need help understanding the mechanism of the systems as IT professionals. This results in decreased efficiency and incapability to use the system to its full potential. As a result, technical problems become unsolvable for the accountants. Participants also claim that IT experts must acquire accounting and auditing knowledge to configure an appropriate software tool simultaneously.

Due to this extensive knowledge gap, it is difficult for accounting. Knowledge Gap, the transition to digital tools may present a knowledge gap between IT professionals and accountants. Decision-making can become challenging without adequate understanding and training in utilizing digital technologies.

For an emerging economy in the Southeast Asian region such as Bangladesh, digitalisation poses cybersecurity risks. Also, there is a lack of knowledge regarding the application of tools, a knowledge gap between professionals, decision-making constraints, and the incapability to fulfil objectives efficiently in an emerging economy. Accountants have perceived the support of the regulatory bodies as a crucial factor for properly implementing digital tools in accounting and auditing. However, due to corruption and many political barriers in an emerging economy such as Bangladesh, there exists a need for more support from the regulatory authorities. Even in the functioning of the regulatory authorities, a need exists for more implementation of digital tools. The regulatory authorities refrain from pressuring existing firms and businesses to use digital tools in accounting and auditing functions. The analysis also suggests a need for more government support for adapting digital tools in auditing.

Implementing digitalisation in accounting and auditing may be financially and technically demanding, especially for smaller businesses or middle-income countries with limited cost-effective audit software. According to a deputy general manager:

In developing countries, small and medium-sized enterprises are less likely to introduce digital technology because of the initial cost (P1).

Through various mentionable events, the data set indicates that applying digital tools exposes accounting information to vulnerabilities. It exposes accounting information specifically to cybersecurity risks at Financial Institutions, such as the recent incident at Bangladesh Central Bank. Evidence has suggested that introducing digitalisation could expose confidential accounting data to risks—cybersecurity threats from internal and external sources. Internally, employees with malicious intent can cause harm to confidential data generated from digital tools. For security, access is given to employees based on their authority and requirement of data and information. However, with that limited access, the employee can cause harm or manipulate accounting information. External threats come from hackers who intend to damage transaction information and their analysis stored on the server. Hackers can steal or damage information and sometimes tamper with the accuracy of accounting data. The professionals highlight Certain limitations for a middle-income country’s economy. Such limitations are unexpected from digitalisation by accountants and auditors. It has been observed that in the case of middle-income countries, audit software could not be more cost-effective. As concerned,

Many organisations lack the necessary infrastructure and resources to fully embrace digitalisation. This can create a divide between those with access to digital tools and those without access (P15).

Digital tools such as ERP systems and SAP audit software are expensive for firms and businesses.

Government support and incentives can ease financial hardships, especially for smaller firms and developing countries. Strong security measures, such as barriers and constrained employee access, can reduce cybersecurity threats and protect against data tampering.

Evidence shows there are solid counter arguments that acknowledge the limitations of digitalisation in Bangladesh context. Although it can somewhat reduce fraud and human error, some businesses may find it financially challenging to employ digital tools. The refutation offers ways around these restrictions in any case. The prevalence of fraudulent actions and financial misrepresentations is significantly decreased when digital tools are combined with appropriate training and security measures. Some participants argue that while digitalisation reduces the risk of fraudulent activities, it cannot eliminate them. As argued by an Internal Control Manager:

The risk could be unauthorized access of any random people which would be a problem for the organization and as the data can be backed up so, it is kept in a cloud so, if the password of the cloud is leaked then the hacker may get access to the information which would be a great risk for the organization (P2).

Also, human error through incorrect input or manipulation of data is still possible. Ultimately, the result of the output obtained is not worth the cost incurred per the data obtained. One of the objectives of digitalisation is to obtain the reliability of accounting data. However, according to the data set referrers, middle-income countries cannot achieve reliability by applying digital tools in accounting and auditing unless they solve the skill shortage and deficiency in investment issues. Ultimately, the application of digitalisation in accounting and auditing comes with concerns.